The Hong Kong Monetary Authority (HKMA) is to begin a study on the use cases of a central bank digital currency (CBDC).
- Hong Kong’s central bank is aiming to “future-proof” the financial center for the growth of CBDCs as part of its “Fintech 2025” strategy, announced Tuesday.
- The HKMA has been working with the Bank for International Settlements to research retail CBDCs.
- It will now study the benefits and risks of a retail digital Hong Kong dollar, or “e-HKD.”
- In CBDC parlance, “retail” refers to a digital currency issued to consumers and businesses directly by the central bank without commercial banks or other entities as intermediaries. In this sense, it would be comparable to digital cash.
- “The HKMA will also continue to collaborate with the People’s Bank of China in supporting the technical testing of e-CNY in Hong Kong with a view to providing a convenient means of cross-boundary payments for both domestic and mainland residents,” the announcement said.